Macroeconomics

Exam Assignment 2
______________________


MULTIPLE CHOICE.   Choose the one alternative that best completes the statement or answers the question.

1)

An increase in the overall price level is known as

1)

___A____

A)

inflation.

B)

recession.

C)

deflation.

D)

stagflation.



2)

Aggregate behavior is

2)

____A___

A)

the behavior of all households and firms together.

B)

the behavior of each individual.

C)

the behavior of each household and firm.

D)

none of the above.



3)

Deflation occurs when

3)

____D___

A)

economic activity declines.

B)

the unemployment rate declines.

C)

the economic growth rate declines.

D)

the average price level declines.



4)

A period of very rapid increase in the overall price level is known as

4)

____B___

A)

stagflation.

B)

hyperinflation.

C)

stagnation.

D)

depression.



5)

The term business cycle refers to the

5)

____B___

A)

long-term trends in the level of economic activity.

B)

short-term ups and downs in the level of economic activity.

C)

short-term ups and downs in the price level.

D)

long-term trends in the price level.



6)

A period when the economy shrinks is known as

6)

____D___

A)

a slump.

B)

a recession.

C)

a contraction.

D)

all of the above.



7)

In a business cycle, a peak represents the end of ________ and a trough represents the end of ________.

7)

____C___

A)

a depression; an expansion

B)

a trough; a peak

C)

an expansion; a recession

D)

a recession; an expansion



8)

In a business cycle, a trough represents the end of  

8)

___B____

A)

an expansion.

B)...